A blog maintained by the team working to hold
oil giant Chevron accountable for its human rights
and environmental abuses in Ecuador

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Wednesday, June 20, 2012

In a recent letter
to the Canadian newspaper, The National Post, Chevron repeats its lies to
distract attention from its own misconduct in the world's largest oil-related
environmental disaster in the Ecuadorian rainforest.

For example, Chevron representatives
are fond of claiming that a number of U.S. courts have “found” that there was
“fraud” in the litigation in Ecuador. This is completely false. When Chevron
made this assertion to one journalist who included it in his story, his
publication, Courthouse News, was forced to run a retraction once it realized
the reporter had been misled, stating that while “[a]n earlier version of this
article quoted a Chevron spokesman as saying that eight federal courts had
found the Ecuadorean plaintiffs had committed fraud. In fact, the courts issued
crime-fraud exception findings during discovery. Chevron’s fraud allegations
against the Ecuadorean plaintiffs remain unproven.” Seehere.

No U.S. court has made any final determination
with respect to Chevron’s fraud allegations. In fact, 13 U.S. courts rejected
or otherwise declined Chevron’s invitation to apply what is known as the
crime/fraud exception. Such an exception requires a court to make only a prima
facie showing that a fraud might have occurred if proven to be true. But no
actual factual findings have been made. As one court succinctly put
it: “The circumstances supporting [Chevron’s] claim of fraud largely are
allegations and allegations are not factual findings."
Another wrote that Chevron was making a "mountain out of a
molehill." See here.

Chevron tries to distract attention from these
facts with statements replete with falsehoods; meanwhile, independent
journalists have long confirmed the company’s hand in creating this
unprecedented catastrophe. See these recent news reports from the
Australia program Sunday Night;
the American show 60 Minutes
and this extraordinary video from the plaintiffs summarizing the
evidence and Chevron’s corrupt attempts to derail the trial. A
story in Vanity Fair
on the courageous Ecuadorian lawyer Pablo Fajardo, who was raised in abject
poverty and who has been targeted with death threats, can be seen here.

Chevron takes emails and other correspondence
out of context and cleverly edits video to make it appear that our own experts
do not believe there is contamination. Yet one of the most respected experts in
the world on how contaminants travel in groundwater – Dr. Ann Maest --
testified under oath recently that there is massive contamination of water in
Chevron’s concession area. See here
and here. In
a blatant act of deceit, in a blog Chevron leaves the false impression that Dr.
Maest agrees with the company that there is no water contamination. See here.

Chevron’s assertion that the plaintiffs wrote
the judgment is a both a fabrication and a final act of desperation. For this
argument, Chevron relies on more paid experts who analyze what they call “word
strings” from an internal memo from the plaintiffs that appeared in a handful
of paragraphs in the 188-page judgment. Yet arguments from the memo using
the same language were submitted to court in numerous motions throughout the
eight-year trial. It is completely plausible for a court to adopt
arguments and language from briefs or other materials submitted to the court.

The real and only fraud is Chevron's
environmental crimes, its phony remediation, its manipulation of evidence
during the Ecuador trial and its abuse of the rule of law by delaying and attempting
to derail the trial during the eight-year-long proceeding. See here,
here
and here.

These facts, as confirmed by Ecuador’s courts
and independent journalists, are bad for Chevron. More to the point, they
explain why the company tried to sabotage the proceedings in Ecuador, and how
it will now try to convince courts it Canada that somehow it was the victim of
a shakedown by indigenous groups in Ecuador.

Thursday, June 14, 2012

The Ecuador indigenous and farmer communities who recently won an $18 billion judgment against Chevron have long maintained that the oil giant has been taking their comments out of context and is lying in its long-running effort to discredit the lawsuit.

Here’s a good example.

This week in a blog on its web site, Chevron claimed that Dr. Ann Maest, a prominent U.S. scientist who worked as an expert for the rainforest communities, testified under oath “that she was not aware of any scientific data indicating that drinking water wells have been impacted in any way by Texpet’s operations” in Ecuador. (Texpet is a Chevron subsidiary.)

What Maest said during three days of deposition testimony was that there was extensive groundwater contamination at Chevron’s production sites, but that there was no data from the plaintiffs about contamination in drinking water wells because no such wells were tested.

In her deposition, Maest repeatedly cites multiple and widespread instances of groundwater pollution at every single waste pit in Ecuador where such testing took place. Yet Chevron claims in its blog that "even the plaintiffs own scientists" agree with Chevron's fabricated theory that there is no groundwater contamination in Ecuador.

Here are some relevant excerpts from the Maest deposition that Chevron failed to mention in its blog:

“There has been some sampling of groundwater that's down gradient of pits, and they did find quite high concentrations of TPH [Total Petroleum Hydrocarbons] in groundwater.” (see 1/20/11 deposition, page 133)

The plaintiffs found "elevated concentrations of total petroleum hydrocarbons and polycyclic aromatic hydrocarbons...downstream of one of the separation stations in the concession." (see 12/8/10 deposition, page 161)

Samples tested from the plaintiff's and Chevron proved that "there are also PHs [a type of oil hydrocarbon] that are high in soil and groundwater immediately under the…pits that were allegedly remediated". (see 12/8/10 deposition, page 203)

Here is how Maest answered questions from a Chevron lawyer about groundwater contamination in Ecuador at a deposition that took place on December 8, 2010 (see page 212) -- an exchange Chevron ignored in its blog posting:

Q. You had no worry about finding -- whether you were going to find it or not?

A. No. We knew at that time that they (the plaintiffs technical team) had found groundwater contamination.

Q. And where was that found?

A. Under pretty much every pit that they looked at.

Just in case you missed that last line: groundwater contamination was under pretty much every pit that they looked at.

So much for Chevron’s claim that plaintiff's consultants agree with Chevron that there was no groundwater contamination in Ecuador.

For more on how Chevron lies to shareholders about the Ecuador litigation, see this report from securities lawyer Graham Erion and this letter from Congresswoman Jan Schakowsky (D-IL), asking the Securities and Exchange Commission to investigate the company.

After an indepth review of the Ecuador and U.S. court record on the case and a trip to Ecuador to view the contamination, Lenczner joined the legal team.

“It (seeing the contamination) influenced my decision a lot. I just saw the devastation … and I’ve seen the plight of these people,” he said. “… Forget the noise about lawsuits and distraction and internal memos and everything else, the fact remains that this is a mess.”

On Friday, the Financial Times reported that BP is hoping to reach an agreement with U.S. authorities which would require it to pay under $15 billion to settle all criminal and civil penalties arising from the 2010 Gulf oil disaster. The Department of Justice is reportedly seeking $20 to $25 billion. Negotiations between the DOJ and BP are accelerating and "an agreement could be reached before the Democratic party's convention in September," the FT reported.

While $15 billion sounds like a lot of money -- and it is -- it is a far cry from what BP owes for the many costs associated with the largest offshore oil spill in history. To date, a full accounting of exactly what BP should owe for its crimes in the Gulf has not been made public. Such an accounting is vital if we are to ensure that justice and restoration are delivered to the Gulf Coast and that such a catastrophe never occurs again.

A straightforward application of just the most pertinent U.S. laws yields a fine of $192 billion. (For simplicity sake, I only address BP's fines.)

Chevron knew full well that an executive at its PR agency, Ogilvy PR, had ties to the Andean parliamentary president in Ecuador, Ivonne Baki, and fired the shop because the agency failed to bend the Ecuadoreans to its will, not because it was a conflict of interest: That, in a nutshell, is the conspiracy theory alleged by The Chevron Pit, a blog maintained by rain forest activists who successfully sued Chevron for its pollution of the Latin American jungle.

Chevron ostensibly fired Ogilvy after it discovered that one of its executives, Felipe Benitez, had given advice to both the Ecuadorean government and environmental groups hoping to preserve the Amazon. We pointed out that the move seemed weird because Benitez's LinkedIn profile listed the fact that he had those clients dating back to 2008, so this shouldn't have come as a surprise.

Chevron Pit now alleges that Chevron knew about Benitez all along and was hoping that he could sway the government to not enforce an $18 billion judgment environmental activists won against the company for polluting the forest:

There is simply no way Chevron could not have known that the firm of its lead lobbyist on the Ecuador matter was also representing Ecuador's government. In fact, we suspect that was all part of the "value" Ogilvy was offering Chevron for its fee of $600,000 per year.

Wednesday, June 6, 2012

The pressure on Chevron over its $18 billion Ecuador environmental judgment
appears to be rattling company management. We already reported how 40
institutional investors hammered Chevron in recent days over its bungling
of the litigation, asking that the long-running case be settled before the
oil giant suffers further damage to its reputation.

Now we have the bizarre saga of Chevron firing its longtime lobbyist in
Washington, the highly-respected and influential Wayne Berman, over
something related to the Ecuador matter. The question is what is that
something.

Last week it was reported Chevron fired Berman's firm Ogilvy
because one of the agency's low-level employees offered advice on
environmental public relations at an event organized by Amazon Watch.
Amazon Watch is that pesky group of environmental activists who have driven
Chevron crazy for years over its failure to clean up its mess in Ecuador.
(Note that the young PR executive who spoke at the Amazon Watch event did
not even mention Chevron and Ecuador.)

This week Advertising Age reported that Ecuador's celebrated Yasuni environmental
project also "halted its relationship with" Ogilvy. The Yasuni is an area of oil-rich rainforest inhabited by two
non-contacted indigenous groups. Ecuador's government is trying to raise
money from governments in exchange for a promise never to let oil companies
exploit the territory.

We were surprised to learn that Ogilivy was representing Chevron -- a sworn
enemy of Ecuador's government given their battles over who should clean up
the oil pollution in the country -- and Ecuador's government at the same
time.

Is there a connection between the two?

We think so. There is simply no way Chevron could not have known that the
firm of its lead lobbyist on the Ecuador matter was also representing
Ecuador's government. In fact, we suspect that was all part of the "value"
Ogilvy was offering Chevron for its fee of $600,000 per year.

Chevron Pit readers may remember postings from several months ago (here and
here) about Chevron offering a bribe to Ecuador's government in exchange for
killing or stopping enforcement of the $18 billion judgment against it for
massive oil contamination.

The bribe included a $500 million contribution to -- you guessed it -- the
Yasuni project coupled with an effort to recruit corporations and
governments around the world to raise more money.

But the plot thickens. The person heading up the fundraising effort for
Ecuador is Ivonne Baki, who has close ties to Chevron and has tried to
intercede on Chevron's behalf before to kill the lawsuit. See this press release and this Miami Herald story. Baki was also reported to be floating Chevron's bribe offer to kill the case from her perch inside Ecuador's government.

How is it that Oglivy and Berman, who have represented Chevron since 2004,
acquired Yasuni as a client around the same time Chevron tried to bribe
Ecuador through its Yasuni payment?

Was Chevron subsidizing the Yasuni PR effort through its own payments to
Oglivy as a way to curry favor with Ecuador's government to kill the
lawsuit?

Did Chevron use a young PR exec as a scapegoat to fire Oglivy because the
Yasuni bribery plot turned south, possibly exposing company officials to
liability under the Foreign Corrupt Practices Act?

Friday, June 1, 2012

The gigantic public relations firm, Ogilvy, hired a young man who has been involved in environmental causes, and Chevron went ballistic, firing the firm and along with it, Wayne Berman, a powerful and influential lobbyist in Washington, DC. Berman is an Ogilvy partner and has worked for Chevron since 2004.

We hear Berman is not happy. Maybe more to follow?

We know all about Chevron's revenge tactics. If you mess with them, you pay a price.

Chevron Corp. (CVX) fired Ogilvy Government Relations as its U.S. lobbyist after a person affiliated with the firm spoke to a group advocating for residents of the Ecuadorean rainforest in a multibillion legal fight with the oil company, a person familiar with the matter said.

On May 9, Felipe Benitez of Ogilvy’s public relations branch gave a presentation to San Francisco-based Amazon Watch on “strategic communications for environmental defense and protection on human rights,” according to that group’s website.
Lloyd Avram, a spokesman for Chevron, which was Ogilvy’s third-largest lobbying client last year, said the company discovered a serious conflict recently. He declined to comment about the nature of the issue or the date Chevron ended its relationship with Ogilvy.

Another person, speaking on the condition of anonymity due to the sensitivity of the matter, said the conflict concerned Benitez and his talk to Amazon Watch, which advocates on behalf of indigenous tribes in the Amazon basin and has called damage from oil drilling in Ecuador “Chevron’s Chernobyl.”

“Chevron discovered a material conflict of interest with Ogilvy,” Avram said in an e-mailed statement. “It could not be resolved and made our relationship with them untenable. Under the terms of our agreement, we terminated the relationship.”

Ogilvy Revenue

Ogilvy received $600,000 from Chevron in 2011 to lobby on energy, environmental, tax and financial policies in the U.S., according to federal lobbying records, making the oil company its third-biggest client by revenues, according to the Center for Responsive Politics, which tracks political and lobbying spending.

Ogilvy, the sixth-largest U.S. lobbying firm by revenue, according to the center, had represented Chevron since at least 2004, public records show. Ogilvy’s various units are owned by WPP Plc (WPP), a communications company based in Dublin.
Avram declined to comment on Chevron’s plans to replace Ogilvy.

While Chevron, based in San Ramon, California, doesn’t operate in Ecuador, it has become embroiled in a lengthy legal fight over the alleged disposal of toxic wastewater from drilling operations by Texaco Inc., which used to operate in the country and was acquired by Chevron in 2001.

Previous Work

Previously, Benitez worked for Fenton Communications, and had helped Ecuador improve its global image, according to his page on Linked In, a social networking website.

“Chevron informed Ogilvy & Mather of its decision to end its relationship with Ogilvy Government Relations because of a perceived conflict with Ogilvy PR,” Rachel Ufer, a spokeswoman for Ogilvy public relations, said in an e-mailed statement, referring to the parent company. “As this is primarily a personnel matter, we are unable to provide further detail.”
Amazon Watch didn’t return a phone call seeking comment.

Chevron is fighting an $18 billion judgment from an Ecuadorean court finding the company was responsible for damage. The company argues that Texaco performed all the environmental remediation under the terms of its contract with Ecuador.
It has accused the plaintiffs’ lawyers and Ecuadorean officials of fraud and misconduct in the case.

Ecuadoreans filed a lawsuit yesterday in the Superior Court in Ontario targeting Chevron assets in Canada as a way to begin collecting on the judgment, because the oil company has few assets in Ecuador.

In Washington, Chevron spent more than $9.5 million on lobbying last year and keeps a team of outside firms to lobby on a variety of issues.

More than 70 companies and trade groups paid Ogilvy Government Relations more than $20 million to lobby on their behalf in 2011, according to the Center for Responsive Politics, which is based in Washington.